Solicitors Act 1974 | Part Payments, Delay And Special Circumstances

Rippon Patel And French LLP v Mowlam [2020] EWHC 1079 (QB)

This was an appeal from a decision of Master Nagalingam in which he found that a bill rendered by the solicitors to their former client had not been paid and that “special circumstances” existed such that a detailed assessment, pursuant to section 70 of the Solicitors Act 1974, should be carried out.

The solicitors appealed on grounds that:

(1) the bill had been paid more than 12 months prior to the application, thus meaning that no detailed assessment could be ordered (see section 70(4) SA 1974) (ground 1); alternatively

(2) the Master was wrong (both in law and in his reasoning) to find that “special circumstances” existed such as to justify a detailed assessment under section 70(3) SA 1974 (ground 2); and/or

(3) the Master failed to take into account the Respondent’s delay in making the application (grounds 3 and 4); alternatively

(4) he erred in failing to order the Respondent to pay security for costs and/or in failing to limit the assessment solely to the question of VAT (ground 5).

In dismissing the appeal on all grounds Mrs Justice Eady found (inter alia) that the Master had been entitled to find that:

(1) The bill had not been paid…

“Payment into a client account is plainly not a payment into the solicitor’s own account (and see rules 2-8 of the Solicitors Regulation Authority Accounts 2011 Rules); even if “the principle [sic] sum has been paid”, that does not mean there has been payment of the sum billed.”

(2) The Master had made a value judgment as to special circumstances…

“Without carrying out a detailed assessment of the costs billed, the Master was entitled to find that there was uncertainty as to the overall level of costs incurred at the point of settlement. He further permissibly had regard to the cap that was said to have been applied to costs in the mediation discussions and to consider how that might have impacted upon the Respondent’s decision to enter into the settlement agreement … These were matters that the Master was entitled to find made this other than a “run of the mill” case and gave rise to “special circumstances” for section 70(3) SA 1974 purposes.”

(3) The Master had taken account of the delay and was entitled to find that this was not a factor that impacted on the making of an order for detailed assessment…

“In the present case, there was some explanation for the Respondent’s delay, albeit this did not cover the entirety of the period in issue and, as the Master found, was plainly not caused or contributed to by the Appellant.”

(4) The Master did not err in failing to order security for costs or to limit the scope of the assessment…

“…the Appellant had not identified before the Master any proper basis for considering that there should be security for costs. The Appellant is obviously protected to some degree by the fact that it holds monies in its client account. In oral argument, Mr Holborn sought to suggest that more recent events raised further doubt as to the Respondent’s ability to pay any sums held to be due but a reference to such matters by counsel during the course of a hearing is insufficient; there is no proper evidential basis on which I could make such a finding.”

“As for the suggestion that the Master ought to have limited the assessment solely to the question of VAT, that fails to engage with the entirety of the Master’s reasoning on “special circumstances”. The Master did not base his finding solely on the issue of VAT but saw this as interwoven with the broader question raised as to the level of costs incurred at the point of settlement.”